Trade war begins against Chinese plywood

A new front opened in the trade war against China when a group of U.S. plywood manufacturersfiled a petition with the U.S. Department of Commerce and the U.S. International Trade Commission. The Coalition for Fair Trade of Hardwood Plywood (CFTHP) claimed that Chinese manufacturers are “dumping” plywood on the U.S. market at unfair prices, a practice enabled by subsidies from the government of China.

The petition requests that the U.S. government investigate these alleged unfair trade practices and their harmful impact on the domestic manufacturing industry, and to apply antidumping and countervailing duties on imports of hardwood plywood from China in order to restore competitive parity in the U.S. market. According to the CFTHP announcement, the petition documents antidumping and countervailing duty margins in excess of 300%.

Over the last several years, the share of the U.S. hardwood plywood market captured by imports from China has grown from single or low double-digits digits to about 50%, according to the CFTHP.“Chinese manufacturers receive an array of government subsidies, including their access to raw materials -- logs and timber -- that come from suspect or illicit sources,” said CFTHP counsel Jeff Levin. Sustainability comes at a cost, Levin points out; operating without any good forestry management practices creates an “enormous unfair advantage for Chinese manufacturers.”

“Sustainably produced and quality certified [U.S.] hardwood plywood that once earned a reasonable profit have been relegated to near-commodity status as Chinese companies ramp up production and exports to the United States, without much attention at all to quality or environmental stewardship,” Levin explained. “Price trumps all else, so it’s no wonder we consistently see the Chinese product undercutting the product made in the USA by 50% or more.”

The CFTHP petition has the support of domestic hardwood plywood manufacturers that together represent about 80% of domestic production, according to the press release. In line with regulatory timelines, the CFTHP expects a preliminary ruling and escrow deposit requirement to be implemented by spring 2013 and a final ruling and duty to be implemented by late fall 2013.